Romeo M. Montenegro, investment and public affairs head of the Mindanao Development Authority (MinDA), told BusinessWorld that the proposal to establish the company “is gaining headway,” following meetings he attended in Manila with national officials.
The legislation will go before the plenary sessions of both Houses of Congress when they return from recess next month.
Senators are waiting for the House of Representatives to consolidate its proposals so the lower house version can be compared with proposals in the Senate.
A measure revising the power industry law now being considered in Congress shields the two hydroelectric complexes from privatization, making them an exception to the Electric Power Industry Reform Act, which specifies that the government be relieved of operating power companies.
However, Mr. Montenegro said a group from Lanao del Sur has signified its opposition to the proposal and backed the privatization of the Agus hydroelectric power complex, located within the province.
The Agus complex is one of the two power complexes that Minpocor will control, the other being the Pulangi complex in Bukidnon. The two power sources have a combined installed capacity of almost one thousand megawatts, about half of the electricity requirement of Mindanao.
Whatever the course of action government selects, the group demanded that 30% of the Agus complex’s income be set aside for people living near the Lake Lanao, which is being tapped to run the complex.
“But the group did not identify who the people would benefit from the income,” Mr. Montenegro said.
The proponents have also been studying the estimated value of the two complexes based on available models. One is the value generated by similar assets that have been sold to the private sector, while the other model is replacement cost, less depreciation since the two plants are fully depreciated.
One proposal is for the new company to pay 25% of the price upfront, while the remainder will be paid out of funds to be borrowed from the national government as PSALM, the current owner of the complexes, only has a remaining life of 11 years.